Foxtel is preparing to launch its much-vaunted third-generation set-top box and digital recorder, the iQ3, in the fourth quarter of this year – about 12 months behind schedule.

The pay TV giant is also planning a major refresh of its main channels to coincide with the multimillion-dollar upgrade, which it hopes will help to reduce customer defections in the face of increasing competitive threats.

The new look for channels such as Fox Sports, premium drama channel Showcase and general entertainment channel Fox8 is being managed by Foxtel’s in-house creative team led by marketing chief Ed Smith, it is understood.

It will coincide with a high-profile pre-Christmas launch of the iQ3 which will contain a suite of new ­features, including the ability for ­viewers to instantly rewind any program back to the start if they turn on halfway through.

Having delayed the iQ3 launch from 2013 due to software issues, Foxtel is now working towards a fourth-quarter launch. It had previously guided that the box would be launched in the second half of calendar 2014.

At the Cannes Lions advertising ­festival in June, Foxtel’s 50 per cent shareholder News Corp Australia revealed the iQ3 was designed to “drive advocacy among existing subscribers", “improve net promoter score". “reduce churn" and “increase demand and new subscribers". It would target “young family ­households who they love their TV" but have different interests and want to watch and record different shows at the same time.

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Foxtel will report its latest financial and customer figures this week when News Corp reports fourth-quarter profits to investors (its other owner Telstra reports on August 14).

News Corp will come under pressure to reveal how many subscribers Foxtel has persuaded to take up its subscription movie service Presto since it launched the all-you-can-eat access to its movie library for $19.99 a month. There are rumours take up has been disappointing. Presto faces coming competition from Nine Entertainment Co’s StreamCo as well as US giant ­Netflix which is believed to eyeing the Australian market for a possible launch next year.

As part of Foxtel’s push to increase household penetration, which has been stuck at 30 per cent due to its limited access to exclusive sports rights, the pay TV operator is planning to launch a broadband service later this year.

Broadband proved a big winner for the UK’s BSkyB when it was run by Foxtel’s now chief executive Richard Freudenstein.